ANATOMY OF A SCAM - A CASE STUDY OF A PLANNED BANKRUPTCY BY ORGANIZED CRIME

• NCJ Number: 11213
• Author(s): E J DEFRANCO
• Date Published: 1973
• Length: 81 pages
• Grant Number(s): NI 71-143-PO
• Corporate Author: US Dept of Justice
• Sale Source: Superintendent of Documents, GPO; National Institute of Justice/
• Publication Type: Report (Study/Research)
• Language: English
• Country: United States of America

Annotation

OBTAINING CONTROL OF A LEGITIMATE BUSINESS AND DRIVING IT INTO BANKRUPTCY IS KNOWN AS ONE VARIATION OF THE SCAM.

Abstract

THE AMOUNT OF AUTHORITATIVE MATERIAL AVAILABLE FOR SOCIAL SCIENCE RESEARCH ON ORGANIZED CRIMINAL ACTIVITIES IS LIMITED. ONE SOURCE WHICH IS AVAILABLE AND USED AS THE BASIS FOR THIS CASE STUDY IS COURT TESTIMONY - BOTH CRIMINAL AND CIVIL - OF CASES INVOLVING ORGANIZED CRIME PRINCIPALS. THIS IS THE STORY OF THE INFILTRATION AND PLANNED BANKRUPTCY OF A LEGITIMATE NEW YORK PACKING COMPANY BY ORGANIZED CRIME AND THE ENSUING NINE YEARS OF LITIGATION DURING WHICH THE GOVERNMENT AND CREDITORS SORTED OUT THE RESULTING CRIMINAL AND CIVIL LIABILITIES. THIS KIND OF INFILTRATION AND DESTRUCTION OF A BONA FIDE BUSINESS IS KNOWN AS A 'SCAM'. ALL SCAM OPERATIONS INVOLVE THE PURCHASE OF MERCHANDISE ON AS LARGE A SCALE AS POSSIBLE THROUGH THE USE OF CREDIT NOW RELATIVELY EASY TO OBTAIN. THE MERCHANDISE IS TURNED INTO CASH WHICH IS THEN MILKED FROM THE BUSINESS. AFTER THE BUSINESS HAS BEEN THUS MILKED, THE COMPANY IS FORCED INTO INVOLUNTARY BANKRUPTCY BY ITS CREDITORS, WHICH, OF COURSE, WAS THE ORIGINAL INTENT OF THE SCAM OPERATORS. SCAM OPERATIONS ARE POPULAR IN INDUSTRIES WITH MERCHANDISE HAVING A HIGH TURNOVER POTENTIAL, READILY TRANSPORTABLE, AND DIFFICULT TO TRACE. THIS CASE STUDY, WITH ITS EXCERPTS FROM TRIAL TESTIMONY AND JUDICIAL OPINIONS, WILL SERVE AS A VALUABLE TRAINING RESOURCE FOR THE STUDENT, BUSINESSMAN AND LAW ENFORCEMENT OFFICER. (AUTHOR ABSTRACT MODIFIED)